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tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: World Bank

01 Feb 2018

Published in Addis: African Union Handbook 2018

The book has at its heart information about the principal organs established by the AU Constitutive Act and subsequent protocols: the Assembly; Executive Council; Permanent Representatives Committee; Specialised Technical Committees; Peace and Security Council; AUC; Pan-African Parliament; Economic, Social and Cultural Council; and judicial, human rights, legal and financial institutions. It also contains information about the specialised agencies and structures, as well as regional and other arrangements, including the RECs, which are the pillars of the AU and work closely with its institutions. Non-governmental organisations, inter-governmental organisations and political groups are not included, except where they have a formal agreement with the AU. The Handbook focuses on the AU’s current structures and organs, including those in the process of becoming operational. [Note: The handbook is available in English and French]

Coalition for Dialogue on Africa officially launches its office at the AUC (UNECA)

The Chair of the Coalition for Dialogue on Africa Executive Board, Olusegun Obasanjo, on Tuesday officially launched CoDA office at the AU headquarters. Mr Obasanjo thanked the AUC for providing office space to CoDA noting that hosting this platform in Addis allows for the continuation of relevant debate and dialogue on matters of relevance to Africa’s situation, while also giving it the benefit of being in the most engaging location to achieve this. The launch of the CoDA office also highlighted the platform’s renewed efforts towards the reduction of illicit financial flows from Africa. In this regard, Chair of the High Level Panel on Illicit Financial Flows, Mr Mbeki challenged CoDA saying that ‘given the severity of issues which face the continent, the platform must take into account the context of the rapidly changing world when seeking to advance Africa’s transformation and future’. Founded in 2009, the Coalition for Dialogue on Africa exists as a special initiative of its three convening organizations - AUC, ECA and African Development Bank.

Air freight demand up 9% in 2017, strongest growth since 2010 (IATA)

The International Air Transport Association released full-year 2017 data for global air freight markets showing that demand, measured in freight tonne kilometers grew by 9.0%. This was more than double the 3.6% annual growth recorded in 2016. Freight capacity, measured in available freight tonne kilometers, rose by 3.0% in 2017. This was the slowest annual capacity growth seen since 2012. Demand growth outpaced capacity growth by a factor of three. Africa region: African carriers’ posted the fastest growth in year-on-year freight volumes, up 15.6% in December 2017 and a capacity increase of 7.9%. This contributed to an annual growth in freight demand of 24.8% in 2017 – the fastest growth rate of all regions. This is only the second time African airlines have topped the global demand growth chart since 1990. Capacity in 2017 increased 9.9%. Demand has been boosted by very strong growth in Africa-Asia trade which increased by more than 64% in the first eleven months of 2017. Related: Global passenger traffic results for 2017. African airlines saw 2017 traffic rise 7.5% compared to 2016. Capacity rose at less than half the rate of demand (3.6%), and load factor jumped 2.5 percentage points to 70.3%. While indicators in South Africa are consistent with falling economic output, Nigeria has returned to growth, helped by the recent rise in oil prices.

Digital usage on services such as SWIFT gpi sets the stage for improved RMB growth (SWIFT)

SWIFT’s latest RMB Tracker reveals a mixed year for the Chinese currency’s growth in 2017 and identifies some of the critical factors for success in 2018. Despite the growing importance of China in the global economy and the various strategic measures put in place to support its currency, Swift’s report shows that RMB usage accounted for 1.61% of domestic and cross-border payments in December 2017. Hong Kong remains the largest RMB clearing centre with 76% activity share, while London remains the largest clearing centre outside of Greater China. However, its share of global RMB clearing activity decreased from 6.51% in 2016 to 5.59% in 2017. The currency is, nevertheless, showing promising signs as it gains pace on digital platforms. Mobile services that expanded usage of the RMB, such as Alipay and WeChat Pay, as well as international initiatives such as SWIFT gpi, continued to grow rapidly throughout the year. Twenty-two Chinese banks have now adopted gpi, helping make RMB payments faster, more transparent and fully traceable. In addition, the prominent role of the CNY/USD pair remained unchanged: 97.08% of RMB trading by value is against the USD and there is no substantial liquidity in any other RMB pair.

Kenya and Tanzania agree to resolve trade barriers (Daily Nation)

Kenya and Tanzania have agreed to resolve their differences and address barriers hindering trade between the two countries. In a joint communique issued in Mombasa, the two countries are to release a report Thursday on agreements to eliminate non-tariff barriers to enhance inter-regional trade. International Trade Principal Secretary Chris Kiptoo and his Tanzanian Industry, Trade and Investment counterpart Elisante ole Gabriel chaired a meeting at Sarova Whitesands Hotel to iron out the trade rows that had threatened to worsen relationships between the two neighbouring states. They said the two countries have agreed to allow importation and exportation of commodities between them.

How Indian firms are tasting success in East Africa (Business Line)

“We are looking at mid-sized companies which have less of a natural inclination to look abroad. Through the SITA initiative we are building bridges between India and East Africa by taking Indian companies to these countries to see with their own eyes what the opportunities are,” said ITC Executive Director Arancha Gonzalez, in a telephonic interview with BusinessLine. Investment flows worth $71m and additional trade flows of $26.5m have so far been generated between India and East Africa (with an additional $10m in the pipeline) as part of the six-year project (2014-2020) funded by the UK’s Department of International Development. Gonzalez will be in India later this week and visit Jaipur, Chennai and Bengaluru to take stock of the progress made so far and prepare the ground for more partnerships.

Mozambique backs regional currency repatriation

The Mozambican central Bank, Banco de Mocambique, is negotiating with its counterparts in neighbouring countries, such as Zambia and Malawi, which have common borders with Mozambique, to repatriate each other’s currencies circulating on either sides of the border, APA can report on Wednesday. Central Bank spokesperson Waldemar de Sousa said because of cross-border trade, people need to have and use the currencies of neighbouring states.

New UNRISD papers on Zimbabwean extractive industry policy issues:

(i) High-value minerals and resource bargaining in a time of crisis: a case study on the diamond fields of Marange. The paper charts Marange diamonds’ evolution as a national resource through three phases of exploitation, marked by successive state management strategies, production schemes, regulatory mechanisms and development outcomes. For each phase of mining, the paper identifies and traces the key dynamics shaping the management of diamond production and trading, and assesses their impact on development outcomes and the governance relations among leading stakeholders. Particular focus falls on the main factors affecting the mobilization and deployment of domestic resources from diamonds, namely: state capacity, coherence and bureaucratic autonomy in the context of state capture and elite interventions in the extractive sector; the power of leading mining industry actors to resist unwelcome regulatory measures by the state; donor influence on resource governance outcomes in a period of continuing economic crisis and state vulnerability to donor pressure; and civil society effectiveness in holding government and business to account through international organizations overseeing the diamond trade, and local platforms for engagement involving legal and political structures. [The author: Richard Saunders]

(ii) Contestation and resource bargaining in Zimbabwe: the minerals sector. Policy making has been disproportionately focused on the accommodation of “market imperatives” and industrial viability, and has been resistant to meaningful, transparent and sustained forms of social inclusion and redistribution. Recurrent macroeconomic vulnerabilities have resulted in strong donor influence, and have strengthened the capacity of foreign capital to obstruct policy implementation. The consequence has been a persistent and evolving weakness in the mobilization of fiscal resources from the minerals sector, representing a lost opportunity for mining’s contribution to social development.

Developing mining supply chains: making strategic use of local content policies (IGF)

The IGF is developing guidance for governments seeking to design effective local content policies. A draft will be presented at the Mining Indaba conference in Cape Town, on 6 February. The guidance document will provide a thorough scan of the various dimensions of local content policies as well as a framework and step-by-step decision tree to help policy makers identify the type of instruments that best suit their objectives. The guidance fills a major gap in the implementation of local content policies: reconciling objectives and instruments. So what does it take to make mining supply chains work? [The authors: Kojo Busia, Isabelle Ramdoo; African Minerals Development Centre]

Egypt’s Sisi inaugurates giant Zohr gas field (Ahram)

Egypt’s President Abdel-Fattah El-Sisi inaugurated on Wednesday the first stage of production at the super-giant Zohr gas field, which the country predicts will help achieve its goal of self-sufficiency in the supply of liquefied natural gas. El-Sisi praised the collaborative effort between several Egyptian companies, including Belayim Petroleum Company, a joint venture between the Italian-Egyptian Oil Company and the Egyptian General Petroleum Corporation, for achieving the project’s development goals. Located 180km off the coast of Port Said and 1,500m deep, the gigantic gas field is the largest in the Mediterranean Sea. Field production would rise to 2.7 billion cubic feet per day by the end of 2019, transforming Egypt into a regional power hub.

Directors General of Customs of MENA region meet to discuss regional priority issues (WCO)

Secretary General Kunio Mikuriya presented the current key priorities of the WCO, concentrating on trade facilitation; e-commerce; security; illicit financial flows; customs-tax cooperation; and performance measurement. He said that he would welcome input from the region regarding prioritization of the WCO’s activities. Delegates supported these areas of priority work, referring in particular to the challenges posed by ever-increasing volumes of e-commerce and the need for sound performance measurement tools.

The changing wealth of nations 2018: building a sustainable future (World Bank)

The Changing Wealth of Nations 2018 tracks the wealth of 141 countries between 1995 and 2014. This new book improves estimates for natural capital and for the first time provides estimates of human capital. FAQ: What happened to natural capital over the past 20 years? The value of natural capital assets doubled between 1995 and 2014. However, it is a mixed picture when you look at the breakdown of assets. Most of the growth in natural capital was in non-renewables (308%), largely because of changes in both the volume and prices of minerals and fossil fuels. The renewables—forests, protected areas, and agricultural land— did not decline in value overall, but increased far more slowly than total wealth (44% compared to 66%). In Latin America and Sub-Saharan Africa, about 7-9% of forest area gave way to agricultural land. The value of total forest assets (timber, non-timber forest products, recreation and watershed protection services) fell by 3% with timber assets falling 9% globally. In Latin America, total forest assets fell by 2% while in Sub Saharan Africa, they fell by 1%.

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This post has been sourced on behalf of tralac and disseminated to enhance trade policy knowledge and debate. It is distributed to recipients across Africa and internationally, serving in the AU, RECs, national government trade departments and research and development agencies.

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